August 21, , by Rob Kaufman. When credit scores came into existence and where they first appeared is a long story - one that actually starts in the mid's. Back in the 's, most credit was conducted by businesses, not consumers.
As business transactions increased, commercial lenders needed to create a way to standardize credit evaluation. In , the Mercantile Agency solicited information from correspondents throughout the country in order to systemize a borrower's "character and assets".
In the end, this data was considered to be too subjective as many of the opinions noted racial, class and gender biases. Subscribers to the Mercantile Agency renamed R. As the everyday citizen's income increased and they desired to have more of the "middle-class" life, it was time for the credit-reporting sector to develop ways to evaluate not just businesses, but consumers as well.
Select basic ads. Create a personalised ads profile. Select personalised ads. Apply market research to generate audience insights. Measure content performance. Develop and improve products. List of Partners vendors. FICO is a major data analytics software company that provides products and services to both businesses and consumers. Previously known as the Fair Isaac Corporation, the company changed its brand name to FICO in and is best known for producing the most widely used consumer credit scores that financial institutions rely on to decide whether to lend money or issue credit.
As of , FICO has offices in 45 locations worldwide, mainly in the United States, Europe, and Asia, and its clients include hundreds of banks, insurance companies, and retailers.
FICO also provides services for debt collections and recovery, customer strategy, fraud protection and compliance, and a variety of other services to businesses. In , the company held patents U. Ninety-five percent of the largest U. The company also asserts that three-quarters of all home loan originations make use of the information provided by its scores and reports.
FICO also maintains a fraud protection service used to safeguard more than 2. The FICO score is so widely used and there is so little competition in the credit scoring industry that if the company becomes unable to provide credit scores, or if its scoring method were found to be significantly flawed, then there could be negative effects throughout the economy. Most mortgage lenders, for example, use the FICO score, so any problem with FICO or its scoring model would have a major impact on the mortgage industry.
For example, there has been some perception that recent generations are aiming to use credit cards less than older generations.
Furthermore, there may be other types of financial indicators that lenders may use to assess potential borrowers. Securities and Exchange Commission. Accessed Dec. Consumer Financial Protection Bureau. FICO solutions leverage open-source standards and cloud computing to maximize flexibility, speed deployment and reduce costs. The company also helps millions of people manage their personal credit health. Founded in , FICO introduced analytic solutions such as credit scoring that have made credit more widely available, not just in the United States but around the world.
We have pioneered the development and application of critical technologies behind decision management. These include predictive analytics, business rules management and optimization. We use these technologies to help businesses improve the precision, consistency and agility of their complex, high—volume decisions. FICO has offices throughout the world serving industries including financial services, health care, insurance, automotive, public sector, retail, pharmaceuticals, telecommunications, travel and hospitality, media and entertainment, high tech and utilities.
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